2025 has thrown up significant challenges for investors. Inflation lingers, central banks are shifting interest rates frequently, geopolitical shocks continue, and tech-driven market swings keep emotions on edge. Amid this turbulence, it’s easy to feel uncertain. What remains important is to consider your investment strategy in relation to your goals and your timeline.
In this article, we are going to look at the three types of investors – short, medium and long term and how each can navigate their journey. Whether you’re saving for a rainy day, a new home, or retirement, understanding your profile can help you weather 2025’s stormy markets with more confidence.
Short-Term Regular Savers (1–3 years)Â
Liquidity is a big consideration for shorter term savers as well as capital protection. With high volatility, preserving what you have is important as you do not have the time to chase growth after any loses. Being aware of interest rates as they are being adjusted contantly and mindful of inflation are key to you’re a successful outcome.
Your strategy should ensure that you keep an emergency fund fully accessible and opt for lower risk savings options. There are several Savings Plan options available in this space that offer higher returns than keeping your money on deposit.
Medium-Term Lump Sum Investors (3–7 years)Â
This group tends to have a defined goal. You’re saving a lump sum to buy a property, fund education, or perhaps start a business. While there’s room to take some risk, there isn’t long enough to fully recover from a major market downturn. Balancing risk and reward when setting your goals is key to success here.
Your strategy should protect your money from market swings by rebalancing, especially as your goal approaches. Careful volatility management is required as well as diversification, across asset classes, as well as geographically. Multi-asset funds can be particularly appealing to this type of investor.
Pension Investors (10+ years)
The most common type of long term investment is to build a pension fund. This is when volatility can be an opportunity. With time on your side, market downturns become chances to invest more at lower prices. But don’t be tempted to exit at those low points. The key is to start with a growth mindset and gradually transition to preservation as retirement nears.
Your strategy also need to take into account the impact of inflation. You not only want to grow wealth but also maintain its purchasing power over decades. A lifecycle fund can be a good option here. These will aim to build a strong equity base early and then tilt towards lower risk funds as retirement nears. Top-ups and maximising tax can also be important con for a longer term pension investor.
Whatever your horizon, short, medium, or long, the strategy is simple. Start with your goal, choose the right tools, and stay disciplined. Give your money room to grow when it can, protect what you’ve saved when it matters most, and avoid letting emotions throw you off track.
If you’re ready to start your savings and investment journey, why not get in touch with one of our financial services team. We’re here not just to help you select the right product but also to help you build better financial habits. Whether you’re a new saver or a seasoned investor, through regular reviews we’ll help you stay on track to achieve your goals.
